EmoMA -research project
Most major companies have developed to their current standing through a series of mergers, acquisitions and/or divestments. Many of them have also chosen mergers and acquisitions (M&As) as their future growth strategy, as the mature markets in which they operate do not allow profitable organic growth. In terms of leadership this is a significant challenge because it means that the organization is under constant change – there is always a group of individuals who are under integration to or prepared for de-integration from the organization. Unfortunately existing knowledge – either in companies or among academic scholars – provides little guidance how to act in this kind of situation, mostly because interest has so far focused in securing the business continuity in changing environment and successful integration of business operations. Surprisingly little attention has been given to individuals and their emotions, and yet it is the very same individuals who are responsible for the performance of the company. We argue that companies need concrete assistance in developing their leadership processes and HRM practices towards emotion management. The TEKES-funded EmoMA-project was carried out at Turku School of Economics 1.1.2015-31.3.2017.
The research project in a nutshell
Acquiring a company is always emotional in one way or the other but when the parties of the deal are based in different cultures, managing emotions becomes all the more challenging. Therefore, there is a need to understand how to manage emotions across cultures, but also to take into account the challenges of the novel organizational structures and means of communication. On the other hand, very little is known about emotion display norms in virtual communication, where non-verbal expressions of emotions are relatively limited. It has been suggested that virtual teams , similar to face-to-face teams, work better when their members share emotion display norm. Furthermore, prior research suggests that display norms call for greater expression of positive emotions and suppression of negative emotions in multicultural teams. (Glikson & Erez 2013.) Nevertheless, little is known about how does the virtuality of teams and communication via electronic means change the communication and interpretation of emotions.
The findings point out that as virtual means of communication increase emotional leadership becomes more and more necessary. Integration necessitates face-to-face interaction, which is challenging in cross-border deals. The more the organization can engage in face-to-face integration at the beginning of integration, the easier virtual communication and emotional leadership become. Virtual communication and different digital means are important in maintaining daily linkages. The amount and quality of communication are important also in forming trust, as uncertainty can create fear, anxiety, sadness and anger.
Emotional expressions can be observed in multiple dimensions of language, including both verbal and non-verbal communication, and ranging from written discourse and face-to-face conversations to facial expressions. In terms of emotions, languages have similarities, for example, most cultures have a word for the basic terms, such as anger, and the experiences the term refers to are comparable. However, the display of emotions may differ due to the context. Employees in diverse cultural contexts will adjust their emotions to the needs and expectations of others at work, just as they do at home and therefore it is essential that internationally operating companies take this into account when introducing universal rules across their organization.
The findings point out that dialogue has a special role in evaluating the quality of communication. By dialogue we mean in-depth, interactive, collaborative communication. Therefore dialogue is a means to engage employees in progressing the integration, which in turn increases the employees' motivation and commitment to the new organization. Successful dialogue is based on building shared understanding and language, meaning that employees need time to internalize the changes brought on by the acquisition in terms of their daily work and the new identity of the organization. Successful dialogue can help organizations to increase employees' positive emotions regarding the acquisition, which helps in avoiding and solving possible conflicts during integration.
Emotions can be positive or negative and therefore their assessment should always include both aspects. However, when assessing the emotional value, emotion researchers also take into account the meeting of emotional needs and expectations. Emotional value is also related to identity, since in cases of major losses, identities are reconstituted, and emotions play a key role in this. Earlier research on emotions in M&A has been notably biased towards negative emotions and their consequences and the positive emotions in the process have been so far completely neglected. Furthermore, the variation of emotions during the M&A process has not been extensively studied.
By emotional value we refer to the balance of positive and negative emotions in the organization. Existing literature focuses mainly on the meaning of negative emotions during integration. Fear and uncertainty regarding one's job and future, as well as sadness over the loss of identity and anxiety related to change, are common emotions. Acquisitions can, however, also trigger happiness and pride. In our research, organizations that moved from the ownership of an investment company to that of a family company were happy about the news. Correspondingly, employees were proud that their organization could buy another, and not be bought. Positivity can also arise from change and the opportunities it brings. Recognizing and emphasizing positive emotions is important in change management during integration. Positive emotions strengthen the employees' identification with the new organization and are important in creating a joint organizational identity.
Acquisitions raise many emotions. Our findings point out that emotions vary, including both positive and negative ones, often even simultaneously. Everyone experiences the deal in their own way, evaluating the situation from their own perspective. From a leadership point of view, it is important to recognize and face the emotions that arise. It is natural, that the buying and target organizations may experience different emotional climates, and that many different emotions may appear in an organization simultaneously.
A major cause for negative emotions is a heavy workload and uncertainty about the future. Integration is wearisome especially for certain departments such as IT, HR and finance. Sharing the workload more equally and balancing resources help to get over the tough times. Continuous communication, even when there is nothing new to report, is important in managing uncertainty. A good emotional leader also accepts the variety of emotions and that all emotions are allowed, but also notices when the emotional balance is shifting.
Raitis, J., Harikkala-Laihinen, R., Hassett, M. and Nummela, N. (Eds.) (2018) Socio-Cultural Integration in Mergers and Acquisitions - The Nordic Approach. Palgrace Macmillan.
Hassett, M., Reynolds, S-N. and Sandberg, B. (2018, forthcoming) The Emotions of Top Managers and Key Persons in Cross-Border M&As: Evidence from a longitudinal case study. International Business Review.
Harikkala-Laihinen, R., Hassett, M., Raitis, J. and Nummela, N. (2018) Dialogue as a source of positive emotions during cross-border post-acquisition socio-cultural integration. Cross Cultural and Strategic Management, Vol. 25 No. 1, 183-208.
Hassett, M., Harikkala-Laihinen, R., Nummela, N. and Raitis, J. (2018) Emotions and virtual teams in cross-border acquisitions. Zerbe, W.J., Härtel, C.E.J., Ashkanasy, N., & Petitta, L. (Eds.) Research on Emotions in Organizations, Volume 14, Emotions and Identity, Emerald Group Publishing Limited.
Harikkala-Laihinen, R., Hassett, M., Nummela, N. and Raitis, J. (2017) Mirror, mirror on the wall...Emotional reflections of a cross-border M&A in media. 43rd European International Business Academy (EIBA), Milan, 14.12.-16.12.2017.
Harikkala-Laihinen, R., Hassett, M., Nummela, N. and Raitis, J. (2017). The good, the bad and the ugly: Emotional leadership following an acquisition. 13th Vaasa IB Conference, Vaasa, Finland, 23-25.8.2017.
Raitis, J., Harikkala-Laihinen, R., Hassett, M. and Nummela, N. (2017) Finding positivity during a major organizational change – In search of triggers of employees’ positive perceptions and feelings, In: Zerbe, W.J., Härtel, C.E.J., Ashkanasy, N., & Petitta, L. (Eds.) Research on Emotions in Organizations, Volume 13, Emotions and Identity, Emerald Group Publishing Limited.
Raitis, J., Harikkala-Laihinen, R., Hassett, M. and Nummela, N. (2017) Identity work in the merger of equals: Unfolding shared understanding through organizational values. EGOS conference, Copenhagen, Denmark, 6.-8.7.2017.
Hassett, M., Harikkala-Laihinen, R., Nummela, N. and Raitis, J. (2017) Emotions in cross-border acquisitions – Perspectives from the parent company, 44th Annual Conference AIB UKI 2017, Henley Business School, Reading, UK, 6.4.-8.4.2017.
Project researchers
Nummela Niina, Professor (D.Sc. in Econ. & Bus. Adm.), Turku School of Economics at the University of Turku. Areas of expertise: Internationalization of small and medium-sized enterprises, international entrepreneurship, cross-border acquisitions, research methodology.
Hassett Melanie, Post Doctoral Research Fellow (D.Sc. in Econ. & Bus. Adm.), Turku School of Economics at the University of Turku. Areas of expertise: Mergers and acquisitions, post acquisition organizational changes.
Raitis Johanna, Post Doctoral Research Fellow (D.Sc. in Econ. & Bus. Adm.), Turku School of Economics at the University of Turku. Areas of expertise: Organisational identity and culture, identification, values, MNCs, cross-cultural research
Harikkala Riikka, Doctoral Candidate (M.Sc. in Econ. & Bus. Adm.), Turku School of Economics at the University of Turku. Areas of expertise: Emotions in mergers and acquisitions, international negotiations.
Experts
Angwin Duncan, Oxford Brooks University, UK
Ghauri Pervez, King’s College, London, UK
Very Philippe, EDHEC, Nice, France
Research partners
Boiger Michael, PhD, Center for Social and Cultural Psychology, University of Leuven/Max Planck Institute for Human Development, Berlin
Cooper Cary, Professor of Organisational Psychology, Lancaster University, UK
Kövecses Zoltan, Professor of Linguistics, Eötvös Loránd University, Budapest, Hungary
Majid Asifa, Professor of Language, Communication and Cultural Cognition, Radboud University, Nijmegen, Netherlands/Max Planck Institute for Psycholinguistics
